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Earnings-Dependent Parental Leave Benefit and Fertility: Evidence from Germany

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  • Cygan-Rehm, Kamila
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    Abstract

    This paper examines the effects of a major change in German parental transfer system on fertility. I use the largely unanticipated reform of 2007 as a natural experiment to assess how an earnings-dependent parental leave benefit effects higher-order fertility. Given the recent introduction, this paper evaluates short-run responses by using data from the German Microcensus 2010. I find that the reform reduced the probability of having a further child in the first three years after birth. However, this effect is mainly driven by mothers on the lower bound of the benefit. Among mothers above the lower bound, short-run fertility responses are less pronounced and vary with potential earnings. The heterogeneity is in line with the structure of economic incentives. --

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    Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order with number 80021.

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    Date of creation: 2013
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    Handle: RePEc:zbw:vfsc13:80021

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    2. Rafael Lalive & Josef Zweimüller, 2009. "How does Parental Leave Affect Fertility and Return to Work? Evidence from Two Natural Experiments," The Quarterly Journal of Economics, MIT Press, vol. 124(3), pages 1363-1402, August.
    3. Dearing, Helene & Hofer, Helmut & Lietz, Christine & Winter-Ebmer, Rudolf & Wrohlich, Katharina, 2007. "Why Are Mothers Working Longer Hours in Austria than in Germany? A Comparative Micro Simulation Analysis," IZA Discussion Papers 2845, Institute for the Study of Labor (IZA).
    4. Mike Brewer & Anita Ratcliffe & Sarah Smith, 2008. "Does welfare reform affect fertility? Evidence from the UK," IFS Working Papers W08/09, Institute for Fiscal Studies.
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    18. Annette Bergemann & Regina T. Riphahn, 2011. "The Introduction of a Short-Term Earnings-Related Parental Leave Benefit System and Differential Effects on Employment Intentions," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(2), pages 315-325.
    19. Alma Cohen & Rajeev Dehejia & Dmitri Romanov, 2013. "Financial Incentives and Fertility," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 1-20, March.
    20. Marcus Tamm, 2009. "The Impact of a Large Parental Leave Benefit Reform on the Timing of Birth around the Day of Implementation," Ruhr Economic Papers 0098, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
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    Cited by:
    1. Johannes Geyer & Peter Haan & Katharina Wrohlich, 2014. "The Effects of Family Policy on Mothers' Labor Supply: Combining Evidence from a Structural Model and a Natural Experiment," SOEPpapers on Multidisciplinary Panel Data Research 645, DIW Berlin, The German Socio-Economic Panel (SOEP).

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